The past few months have been eventful for electricity distribution companies (discos).
It started in December last year when UBA bank took over Abuja disco for defaulting on its loans. Fast-forward to July 2022, and five discos have also been restructured.
Key takeaways:
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Last week, five discos were restructured, and so far, eight out of 11 distribution companies (discos) have either been sold or taken over by banks due to poor financial performance. Enugu, Eko and Ikeja are the last discos standing.
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The financial performance of the discos has been lacklustre with poor revenues and low collection rates. However, while the Lagos discos, Ikeja and Eko are doing better than others, running a distribution company is not an easy business.
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When new investors take over the discos, their chances of success will be greater if they can get the right policy support from the regulators and the government.
Fidelity Bank
